EU delays vote on labeling oil sands oil dirty

BRUSSELS – The European Commission will delay asking members to approve a measure that would label oil from oil sands as worse for climate change than crude oil — a proposal that had been vigorously opposed by Canada, where such oil is produced.

The Commission will ask the EU's 27 environment ministers to vote on the measure early in 2013 rather than this June, Isaac Valero-Ladron, a spokesman for EU Commissioner for Climate Action Connie Hedegaard, said Friday.

In the interim, the Commission, the EU's executive arm, will study the proposed fuel quality law's impact on business and markets, as some EU countries had requested.

The delay reflects an attempt to build support for a proposal that has been the subject of intense lobbying by Canadian officials, and the recipient of only shaky support within the European Union. In February, an EU committee failed to reach a definite decision on the measure, neither approving it nor killing it.

"The idea is to present members an even more solid basis for decision," Valero-Ladron said of the study.

Canada's minister of natural resources, Joe Oliver, welcomed the proposed review and said Canada would cooperate with it.

"We hope that the European Commission will conduct a full impact assessment that deals with the potential costs of this measure to consumers and also the potential costs to the EU's economy," Oliver said in a statement.

The proposal in question is a revision of the EU's Fuel Quality Directive, which sets a mandatory target for fuel producers and suppliers to reduce the carbon emitted by fuels by 6 percent from 2010 levels by the year 2020. While it would not ban oil from oil sands from being imported into the EU, the proposal would assign that oil a bigger carbon footprint than average crude oil.

Opponents of the proposal say, in practice, that would amount to an import ban.

Oil sands, also known as tar sands, are sand and rock that contain crude bitumen, a heavy, viscous form of crude oil. Canada's western province of Alberta has the world's third-largest oil reserves after Saudi Arabia and Venezuela, with more than 170 billion barrels.

Under the European Commission proposal, oil extracted from oil sands would be deemed to emit 22 percent more greenhouse gas by weight than the average for crude oil. It would apply to such oil produced in Canada and Venezuela.

Canada currently sells very little oil to Europe, but those in the industry fear a "dirty oil" label there could set a dangerous precedent.

Greenhouse gases, primarily carbon dioxide, are believed to contribute to the warming of the earth's climate.

Canada has threatened to take the EU to the World Trade Organization if it singled out that type of oil as worse for the environment than others. But the European Commission, the EU's executive branch, contends that science justifies its proposal.

The measure is also supported by environmental groups such as Friends of the Earth Europe and Greenpeace.

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Rob Gillies in Toronto contributed to this report. Don Melvin can be reached at http://twitter.com/Don_Melvin